1. Role of LGUs in the Delivery of Quality Basic Education
Department of the Interior and Local Government

2. Outline of Presentation
Role of LGUs on Basic Education
Special Education Fund
Legal Basis for Utilization
Current Practice on Allocation of SEF
Local Special Bodies
Functions and Composition
Challenges and Recommendations
Reform SEF and LSBs to support education
Increase SEF collection via updating SMV

3. Context: why good education matters
Educational attainment of household head is important determinant of poverty status of HH.
Poverty incidence is found to be higher among households with household head with lower educational attainment.

4. Role of LGUs in Basic Education
Basic public education – still largely responsibility of central government, delivered through DepEd
With devolution policy, providing for basic education is shared with LGUs.
Basic services and facilities assigned to LGUs include school buildings and other facilities for public elementary and secondary schools (LGC, Sec. 17)
LGUs provide supplementary finance for public basic education thru SEF which are the proceeds of 1% additional tax on real property (LGC, Sec. 235)
LGUs have the means to contribute to the improvement of basic education outcomes through more efficient and effective use of the Special Education Fund (SEF).

5. Special Education Fund (SEF)

6. Special Education Fund (SEF) OVERVIEW/LEGAL FRAMEWORK (LGC Section 235 and Sec 272)
SEF are proceeds from the additional one (1%) on the assessed value of real property tax which shall be in addition to the basic real property tax impost by provinces or cities, or a municipality within Metropolitan Manila Area (MMA).
SEF shall be automatically released to the local school boards: Provided, that, in case of provinces, the proceeds shall be divided equally between the provincial and municipal school board.
SEF income has been growing through the years, with increasing RPT assessments and a more aggressive tax collection by LGU.

7. Utilization of SEF LGC (LGC Secs 100 and 272) prioritized SEF for
(1) construction, repair & maintenance of school buildings and facilities;
(2) extension classes;
(3) educational research;
(4) books and periodicals; and
(5) sports development activities from barangay to national levels.
Joint circulars of DepEd, DBM and DILG expanded list to include salaries of teachers and non-teaching personnel; IT resources; citizen development and other co-curricular activities.

8. SEF: reliable source of funding for basic education
Source: Study of Manasan and Castel, 2010)
SEF income grew from PhP 8.5 B in 2001 to PhP 14.2 B in 2007
SEF expenditure increased from PhP 7.8 B in 2001 to PhP 12.1 B in 2007
Equal to 7%-10% of total DepEd spending
Equal to 6%-9% of total General Spending on Education
Total LGU Expenditure on Education is P11B in 2011 to P 14B in 2007

9. Median SEF spending per pupil in municipalities and cities
Wide disparity in SEF resources across LGUs of different income classes
Just as wide disparities in local income, there are substantial disparities in per pupil SEF spending across different income classes. To wit , per student spending of NCR cities is almost 3 times as 5th income class cities.
This occurs primarily because the more urbanized LGUs tend to have larger RPT base as a result of the higher property values in these LGUs compared to less urbanized LGUs.
Median SEF spending per pupil in municipalities and cities
CY 2006
Municipal
Income Class
Median SEF of Cties
City
Median SEF
1st
143
NCR cities
1938
2nd 87
1st (non-NCR)
669
3rd 68
2nd-3rd
453
4th 59
371
5th 45
249
Source: Study of Manasan and Castel, 2010)

10. SEF Expenditure per student vs. DepEd School-level MOOE per student
In the aggregate, SEF expenditures per student in 2007 is significantly higher that the DedEp allocation for school level MOOE. In particular, if one assumes that all SEF are expenditures are spent on school level MOOE and if SEF are distributed across LGUs in direct proportion to enrollment, their per student ratio would be P 692 which is 3.4 x the DepEd allocation for school level MOOE.
SEF Expenditure per student vs. DepEd School-level MOOE per student SY
DepEd School Level MOOE per Student
Aggregate SEF expenditure per Student
Elementary level P 207
Secondary level
regular curriculum P 500
tech-voc-curriculum - P 700
Aggregate SEF expenditure per student P 692
Source: Study of Manasan and Castel, 2010)

11. Current Practice on Allocation of SEF
In the aggregate,
almost half of the SEF is spent on MOOE
27-29% for PS and
23-30% to CO.
Budget Share of PS, MOOE, and CO in SEF expenditures, CY
CY Year PS
MOOE CO
2006
26.6
43.3
29.6
2007
29.1
48.4
22.5
2008
28.7
48.8
Source: Study of Manasan and Castel, 2010)

12. 2010 study on how to improve the SEF (Manasan, Castel)
FINDINGS
Excessive emphasis on hiring locally funded teachers vis-à-vis low priority for school building construction
Unclear interpretation of LGC as to the “operation and maintenance of schools”
Mismatch between actual school-level needs and LGU spending priorities for SEF
Need to clarify “sports activities” in light of transfer of DEpEd functions related to sports competition to the Philippine Sports Commission under RA 9155

13. Local School Boards (LSBs)

14. Local School Boards (one of the Local Special Bodies)
Councils, committees or the like created to perform definite functions on the LGUs. There are five of such bodies, namely,
Local Development Councils (LDC)
Local Prequalification, bids, and awards committees (LPBAC)
Local School Boards (LSB)
Local Health Boards (LHB)
Local Peace and Order Council (LPOC)
There shall be established in every province, city, or municipality a provincial, city, or municipal school board
The LSB is the body primarily responsible for the allocating the share of the LGU in the Special Education Fund (SEF).

15. Functions of the Local Special Bodies
Local Development Council
Assist the Sanggunian in setting the direction of economic and social development and coordinate development efforts
Local Health Boards
Advisory to the Sanggunian on health matters
Propose budgetary allocation for health facilities and services
Local School Boards
Advisory to the Sanggunian on education matters
Responsible for allocating the share of LGUs in the SEF
Local Peace and Order Council
Responsible for proposing programs for peace, order and public safety in localities
Local Prequalification, Bids and Awards Committee
Responsible for prequalification of contractors, bidding, evaluation of bods and recommendation of awards of projects

16. Activities and Budget of LSBs (LGC Sec. 100)
Meet at least once a month or as often as may be necessary.
Local chief executive concerned, as a matter of protocol, shall be given preference to preside the over the meeting.
Division superintendent, city superintendent or district supervisor, as the case may be, shall prepare the budget of the school board concerned. Such budget shall be supported by programs, projects, and activities of the school board for the ensuing fiscal year.
The affirmative vote of the majority of all the members shall be necessary to approve the budget.

17. Challenges and Recommendations

18. Challenges
Need for greater alignment of the SEF with the programs and priorities of national government. Information on the allocation from the national budget have to be communicated to LGUs to ensure the SEF is used to advance programs for basic education.
Need for clearer statements as to allowable expenditures chargeable to SEF expenditures under SEF particularly expenditures are included under “expenditures for operation and maintenance of public schools” as per Sec of LGC
Need for clearer assignment of expenditure responsibility – DepEd vs. provincial LSB vs. municipal/ city LSB
Need to strengthen link between LSB/ SEF utilization and implementation of Kto12
Information sharing between DepEd (not just at Division and District Office level but also Central Office level) and LSBs
Need for better coordination between provincial LSBs and municipal LSBs
How does LSB relate to School Governance Council?

19. Proposed Recommendations
Improve SEF utilization guidelines prescribed in LGC
Avoid expenditure overlaps by clarifying well who should spend for what--DepEd or LGUs e.g. textbooks
Increase equity in education spending by providing more to LGUs with low real property tax base

20. Proposed Recommendations
Improve revenue collection for SEF. SEF grows when RPT collections improve
The efficiency of LGUs in collecting real property taxes improved significantly between 2007 and 2012.
RPT collection efficiency (collections as a proportion of collectible amount),

21. PROBLEM: real property values are not being updated
Challenges
PROBLEM: real property values are not being updated
Political Difficulty
Sanggunian members, who must approve the new market values, are reluctant to enact the relevant ordinance due to its political backlash.
Outdated Valuation
Many LGUs have NOT regularly updated their schedule of market values—the basis for computing the RPT—resulting in lower-than-expected collections.

22. Proposed Recommendations
Transfer the mandate to approve the schedule of market values (SMV) for real property from the Sanggunian to the Department of Finance
LGUs to retain autonomy in setting assessment levels and tax rates for real property

23. Thank you